Oil lobbyist says industry needs a level playing field in Louisiana

By Ken StickneyThe Advocate (Baton Rouge)

Friday

Oct 11, 2019 at 7:17 PM

BATON ROUGE -- LOGA's statewide pitch for political candidates in Saturday's election might level the energy industry's playing field in Louisiana. That's what Gifford Briggs, president of the Louisiana Oil & Gas Association, has suggested to audiences around the state for the past two weeks.

Briggs took LOGA's "state of the industry" message to Shreveport, New Orleans, Lafayette, Houma and Baton Rouge since October's outset, urging his more than 1,100 trade organization members to make votes in key state elections Saturday.

Briggs said the state's legal environment undermines the energy industry's strength in Louisiana. In specific, he said in an interview this week, state leaders -- he blames the John Bel Edwards administration -- have encouraged environmental lawsuits against the industry, which he said soured prospects for investment in Louisiana. That's been state Republicans' position since Edwards took office.

Edwards supporters say, in turn, that the governor has protected the state's coastline, which loses land to erosion because of human activity, including coastal drilling operations. Some geologists say the state's land loss is about a football field by the hour.

"That's what our members tell us; that's what outsiders tell us," Briggs said of the legal environment. "When they talk about (drilling for oil and gas), they say we have great prospects, but we cannot find investors. Louisiana has become off limits. The legal environment has become too risky," Briggs said.

What states have better law? Briggs suggested the other 49.

"None of them have the legal challenges we do," he said.

Briggs said "legacy lawsuits," those involving claims against oil companies over environmental damages, began around 2003. He said Gov. Kathleen Blanco, D-Lafayette, "tried to handle those in a responsible manner." Coastal lawsuits, he said, accelerated during Gov. Bobby Jindal's administration, as plaintiffs' attorney sought large damages.

Briggs charged that the machinery of state government has since been turned against Louisiana's oil and gas interests by the threat of lawsuits and by a slowdown in approving state permits. That, he said, sent a "chilling message" to investors and sent them to other states to drill.

Briggs said LOGA's message this month has been that for the industry to succeed in Louisiana, it needs fair legal, regulatory and tax environments. He said the oil and gas industry is "not winning in any of them."

Gary Wagner, who holds an endowed chair in economics at the University of Louisiana at Lafayette, said this week he agrees in general with LOGA's assessment. But, he added, Louisiana's overall business climate is poor.

He said ideally, states tax businesses at low rates with a broad base of businesses paying taxes. Louisiana, he said, taxes businesses at high rates and offers "lots of exemptions and a substantial number of business incentives," some unnecessarily.

For example, he said, Louisiana offered some $2.9 billion in incentives, state and local, between 2010 and 2017, the third-highest per capita in the country. Despite that effort, the state had slow growth. That's why he said the state would be better off to change its tax philosophy.

Part of Louisiana's failure to provide a better business environment, he said, may be revealed in outmigration. He said Louisiana has lost some 90,000 college graduates to other states from 2000-2017. The second-most cited reason for outmigration, he said, is lack of economic opportunity. That hurts not only oil and gas, he said, but everyone else.

Nonetheless, Briggs told LOGA audiences that there is some reason for optimism.

He said drilling in the Haynesville shale is "picking up" and that lease sales for tracts in the Gulf of Mexico were brisk this year. That's what he told association members.

"Chevron and BP continue to make acquisitions," he said of offshore. That's a welcome turn from mid-decade, when the price of a barrel of oil plunged and investors shunned offshore development.

Since then, Briggs said, oil and gas operators have fled the state, with drilling picking up in New Mexico, West Texas and Pennsylvania. He said he was glad Louisiana people found work elsewhere, but they will be needed here.

"They're not going to come back if we don't change the culture of the state," he said. "Right now, the jobs aren't here."

Economist Loren Scott also voiced optimism for next year, suggesting the Gulf of Mexico's rig could increase from 25 to the 33-35 rigs range. Such an increase in rigs would benefit the Lafayette Metropolitan Statistical Area and count make the area the third-fastest growing MSA in the state.

Briggs suggested that President Trump's enthusiasm for making the U.S. "dominant" in global energy production would help boost Louisiana's energy prospects.

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